Über die Autorin bzw. den Autor

Deborah K. Dilley, Director, SmartPros Banking, is a seasoned financial services executive and senior manager with a successful two-decade career in the banking, high tech, and corporate training industries. She was founder and CEO of Sage Online Learning, Inc. prior to its acquisition by SmartPros, Ltd., and has held senior management positions at Bankers Trust (now Deutsche Bank), Wells Fargo, and Omega Performance Corporation, where she served as executive vice president. Dilley brings an in-depth knowledge of the regulatory demands and training requirements of the financial services industry, as well as the technical know-how to deliver online learning reliably and effectively.

Von der hinteren Coverseite

The essential guide for finance professionals in allindustries for quick answers to banking questions

Essentials of Banking is designed with appreciation for demanding professional obligations, with information easy to find and at your fingertips. Its nuts and bolts presentation explains the regulatory, business, and people facts of the business of banking in a handy, concise format. Whether you are a teller in a bank located in a small agricultural community in the Midwest, a management trainee in a regional bank with offices throughout the Southeast, work in a bank that has locations across the United States and several foreign countries, or you are someone who simply needs to gain a better understanding of banking concepts, this book will introduce you to the world of banking by looking at the industry both from a historical and present day perspective.

A practical resource for traditional bankers, online bankers, and finance professionals in any industry, Essentials of Banking provides you with an understanding of:

• Deposit Insurance and the Regulatory Environment

• Regulatory Compliance

• The Business of Banking and the Bank Secrecy Act

• An Introduction to Ethics

• Customer Service

• What Every Banker Needs to Know

• How Cross-industry Affiliations May Significantly Change the Face of Banking

Examining how the focus in banking has shifted from a historical product-driven focus to a customer-driven focus and the ways in which banking is using multiple channels to service customers rather than relying solely on banking offices, Essentials of Banking is the only guide you will need containing all the relevant facts of banking, all in one place.

Aus dem Klappentext

The essential guide for finance professionals in allindustries for quick answers to banking questions

Essentials of Banking is designed with appreciation for demanding professional obligations, with information easy to find and at your fingertips. Its nuts and bolts presentation explains the regulatory, business, and people facts of the business of banking in a handy, concise format. Whether you are a teller in a bank located in a small agricultural community in the Midwest, a management trainee in a regional bank with offices throughout the Southeast, work in a bank that has locations across the United States and several foreign countries, or you are someone who simply needs to gain a better understanding of banking concepts, this book will introduce you to the world of banking by looking at the industry both from a historical and present day perspective.

A practical resource for traditional bankers, online bankers, and finance professionals in any industry, Essentials of Banking provides you with an understanding of:

• Deposit Insurance and the Regulatory Environment

• Regulatory Compliance

• The Business of Banking and the Bank Secrecy Act

• An Introduction to Ethics

• Customer Service

• What Every Banker Needs to Know

• How Cross-industry Affiliations May Significantly Change the Face of Banking

Examining how the focus in banking has shifted from a historical product-driven focus to a customer-driven focus and the ways in which banking is using multiple channels to service customers rather than relying solely on banking offices, Essentials of Banking is the only guide you will need containing all the relevant facts of banking, all in one place.

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

Essentials of Banking

John Wiley & Sons

Chapter One

After reading this chapter, you will be able to:

Understand the origin of banking and how it has evolved.

Explain the role of banks in the creation of money.

Discuss the essential elements of electronic banking and funds transfers.

Recognize the role of banks in financial intermediation. Describe the range of products and services offered by banks.

Understand how financial products and services satisfy the needs of customers.

What Is a Bank?

A bank is defined by Merriam-Webster's online dictionary (www .merriamwebster.com) as "an establishment for the custody, loan, exchange, or issue of money, for the extension of credit, and for facilitating the transmission of funds."

While they are simple to describe, the roles of banks, bankers, and banking are-for some-not as simple to understand.

"Banking" can be defined as "the business of banking," a vibrant business that continually evolves to meet the latest financial needs and economic conditions. In order to understand how banking evolves, it is important to gain a broad understanding of financial concepts, fundamental banking functions, and the banking business in a technology-driven world.

From Barter to Payment Systems

Money is the basis of banking. And the basis of money is the need for a substitute for directly bartering for everything we need. "Barter" is defined as trading without the use of money-and it can be traced back to the very origin of civilization. Can you imagine how our economy would operate if we didn't use money? You would either have to be completely self-sufficient or have to produce a good or service that you could trade for whatever you could not produce yourself. Most of us would spend our time making almost everything we needed (including growing food, building shelter, and making clothes) or working at a specialty that others needed so we could trade for many of the necessities of life. The specialties would be few. Our technological advances would be restricted by an incredibly inefficient system of exchanging goods and services.

The development of money was a significant advance over barter as a payment system. But today we have extended the concept of payment systems way beyond the original concept of money. One of the first steps into more sophisticated payment systems was the development of checks and checking accounts.

Money is a symbol of value, and checks are a symbol of money. We give another person a check when we want to give him or her money. The other person then takes that check and sends it through the check clearing system so that the money it represents is transferred from us to him or her.

Believe it or not, prior to the age of computers, banking employees posted transactions on individual account cards. Banks had to close for business early in the afternoon so that several hours could be devoted to recording and reconciling the day's transactions.

The early computer systems used in banking seemed like a tremendous advance over manual systems. But today they seem like pocket calculators compared to the computing power that the banking industry and customers depend on and, frankly, take for granted.

Computers have changed the face and complexion of the banking business. Computers have changed how customers use banking services, how banks operate internally, and how banks interact with the rest of the financial system.

Technology has revolutionized banking and continues to do so at a fiercely accelerating speed. Computers, the Internet, mobile technology, wireless access, and other improved communication systems give banking great flexibility and efficiency. All of this growth continues to create new opportunities to reinvent banks and, in particular, banking careers.

Banking also fulfills a valuable role in society by:

Playing a key role in financial intermediation

Creating financial products and services that benefit businesses and consumers

Driving a thriving financial system regulated by state and federal governments

Facilitating the creation of money Being involved in the transfer of funds

Reinventing the financial future-the future of banking

In order to understand the business of banking, it is useful to understand one of its key elements-financial intermediation.

Bank's Role in Financial Intermediation

Financial intermediation is an important role in banking. The term "financial intermediation" means accepting funds from one source (such as savings customers) and using the money to make loans or other investments. Essentially, financial intermediation means acting as a go-between for individuals or businesses that have extra money and individuals or businesses that want to borrow money.

Each person or business with extra funds could try to find a borrower on its own, but the process would be time-consuming and difficult. Can you imagine how difficult it would be to find another person who would want to borrow the exact amount of your savings for the length of time you want to lend it?

Financial intermediation is a business activity that supplies a service by pooling funds from many different sources and advancing loans and making investments. The people and businesses that supply the funds receive interest or services for allowing their funds to be pooled and loaned out or invested. The borrowers pay interest for the privilege of borrowing money they use to generate income or meet other goals.

Another way to understand financial intermediation is to compare it to another type of intermediation. Consider how a blood bank operates. A blood bank finds healthy individuals and arranges for them to donate blood. The blood bank then processes the blood and makes it available to hospitals. The blood bank does not actually use the blood; it simply acts as a channel (or intermediary) between the donors and the hospitals.

Just as the blood bank functions between the donor and recipient of blood, a bank acts as an intermediary between those with extra money and those who want to borrow money. It is a financial intermediary. This is one of the unique characteristics of financial institutions, and of banks in particular-their role as financial intermediaries.

Banking and the "Creation" of Money

Banking plays the most critical role in the "creation" of money-no, not by cranking up the presses and printing money. Banks do not print currency. What we mean by the "creation of money" is this: The financial system "creates money" by expanding the supply of money through deposit and loan transactions. Exhibit 1.1 is an example of how it works.

In addition to the creation of money, banking plays an important part in the economy by providing for payment mechanisms or methods to transfer funds. Cash is the historical basis for trading goods and services in our country, but today most consumers or businesses use other methods to transfer funds from one person or business to another.

The traditional system historically is the use of checks and checking accounts. Our payment systems, however, have evolved to include other systems such as credit cards, debit cards, paperless checks, and electronic transactions (such as payments that are automatically deducted from checking accounts) to give consumers and businesses...